Job Analysis:

What Is Job Analysis?

The systematic process of collecting information that identifies similarities and differences in the
work.

Why Perform Job Analysis?

1. Potential uses for job analysis exist for every major human resource function
2. An internal structure provides a work-related rationale for pay differences
3. Uses of job analysis in compensation
4. Establishes similarities and differences in work content of jobs
5. Helps establish an internally fair and aligned job structure

What Information Should be Collected?

 Analysis begins with a review of information already collected

Types of information collected

1. Related to job
2. Related to employee

Data Collection for Job Analysis:

Data Related to Job

Job Identification

Job Content

Data Related to Employee

Employee Characteristics

Internal Relationships

External Relationships

Job Analysis -Data Related to Job

Job Identification
Title
Department in which job is located
Number of people who hold job

Job Content
Tasks
Activities
Constraints on actions
Performance criteria
Critical incidents
Conflicting demands
Working conditions
Roles (e.g., negotiator, monitor, leader)
Job Analysis -Data Related to Employee
Employee Characteristics
1. Professional/technical knowledge
2. Manual skills
3. Verbal skills
4. Written skills
5. Quantitative skills
6. Mechanical skills
7. Conceptual skills
8. Managerial skills
9. Leadership skills
10. Interpersonal skills
Internal Relationships
1. Boss & other superiors
2. Peers
3. Subordinates
4. External Relationships
5. Suppliers
6. Customers
7. Regulatory
8. Professional/Industry
9. Community
10. Union/Employee Groups

Who Is Involved in Job Analysis?

1. Who collects the information?
2. Who provides the information?
3. What about discrepancies?
4. Top management support is critical
Problems with Job Analysis
Job Analysis Stakeholders

 Executive management -
 <How much is it going to cost?
 <How will it help us better meet our
business objective
 Supervisors
 <How much time will it require (own &
staff)?
 <How much will it impact our ability to get
our job done?
 <What is the benefit in participating
 Employees -
 <How much will it disrupt my day?
 <Does participation pose a personal risk?
 <What’s in it for me
Obtaining Executive/Supervisory Support
1. Link job analysis to existing organizational concerns
2. Demonstrate the multi-functional uses of job analysis
3. Include communication from high level of management
4. Demonstrate the need for defensible processes
5. Use methods that minimize staff time
6. Obtain a departmental liaison for communication/scheduling
7. Obtain a liaison for the distribution & collection of matierals
8. Consider public information opportunities
9. Have a written plan and share
Prepare people to participate
1. The purpose of the study and how it will impact them
2. The importance of their participation
3. How the information that they provide will be used
4. Their specific role in the process and other process components
5. The logistics for their participation
6. The time requirements for their participation (make it
reasonable)
Obtaining co-operation
1. Be prepared: know areas to pursue, areas to be wary of, and
current issues
2. Make the process as comfortable and non-threatening as
possible
3. Re-emphasize the purpose of the study and the importance of
their participation
4. Allow for occasional tangents
5. Share the information
6. Say thanks
Meeting facilitation techniques
1. Round-robin meeting start
2. Work from general to specific; tasks to KSAs
3. Flexible agenda to accommodate group interaction
4. Allow for tangents
5. Summarize and feedback information
6. Redirect and prompt when necessary
 Compensation Management
Contrasting Perspectives of Compensation
Society’s Views
Stockholders’ Views
Employees’ Views
Managers’ Views
 Compensation refers to all forms of financial returns and tangible
services and benefits employees receive as part of an employment
relationship.
 Compensation Management is an organized practice that involves
balancing the work-employee relation by providing monetary and non-
monetary benefits to employees.
 Compensation includes payments such as bonuses, profit sharing,
overtime pay, recognition rewards and sales commission. Compensation
can also include non-monetary perks such as a company-paid car,
company-paid housing and stock options. Compensation is an integral
part of human resource management which helps in motivating the
employees and improving organizational effectiveness.
Components of compensation
 Basic
 Allowances
 Incentives
 Benefits
 Any other component
Types/Forms of Compensations
 Direct Compensation
 Indirect Compensation
 Deferred Compensation
Why Compensation Management
• Has positive impact on the efficiency and results produced by
employees.
• Encourages the employees to perform better and achieve the standards
fixed.
• Helps management in complying with the various Labor Laws.
• Helps to solve disputes between the employee union and management.
Helps in following principle of equal pay.
• Aims at creating a healthy competition among employees and
encourages employees to work hard and efficiently.
• Provides growth and advancement opportunities to the deserving
employees.
Hay Group on reward strategy
 Enables the long-term sustainable success of the organisation.
 Pays out over the same timescale that business value is created in.
 Is linked to a bundle of performance measures that reflect the impact of
the activity not only on shareholder value but on the bigger picture
 Does not enrich management and employees to the detriment of
shareholders.
 Takes account of the extent to which performance is driven by external
factors beyond management or the employee’s control.
 Takes account of the risks inherent and capital employed in the business,
and the impact this has on the returns required by shareholders.
 Achieves an appropriate balance between individual, team and
corporate performance.
 Is competitive enough to attract the talent the business needs.
 Encourages rational thinking about the unique combination of
economical and societal responsibilities of the individual company.
 Is justified in differentiating between the highest and least well paid by
impact, workload, intensity and personal risk.
 Is actively, effectively and repeatedly communicated to employees and
stakeholders.
 Recognises that reward is more than pay.
Relational Returns from Work
Recognition & Status
Employment Security
Challenging Work
Learning Opportunities

Pay model notes:

Salary
 Cost to Company (CTC)
Cost to Company or CTC is the cost that the company would incur
on an employee. CTC is the cumulative of all allowances and
incentives added to the basic salary. This may include free meals,
office space rent, free cabs, subsidized loans, etc.
CTC = Direct Benefits + Indirect Benefits + Savings Contributions

DIRECT BENEFITS INDIRECT BENEFITS SAVINGS CONTRIBUTIO

Basic Salary Interest free loans Superannuation benefit
Food Coupons/Subsidized
Dearness Allowance (DA) Employer Provident Fun
meals
Company Leased
Conveyance Allowance Gratuity
Accommodation
Medical and Life Insurance
House Rent Allowance (HRA)
premiums paid by employer
Medical Allowance Income Tax Savings
Leave Travel Allowance (LTA) Office Space Rent
Vehicle Allowance
Telephone/ Mobile Phone
Allowance
Incentives or bonuses

Special Allowance/ City

Compensatory allowance, etc.

Different types of salary

 Gross salary
 Net salary
 Take home salary

Fixed pay is what is defined and fixed and you will get the same salary which
was stated in the letter of salary structure. Your package = Fixed Pay(X% of
total package) + Variable pay(100-X% of total package). So Variable pay is the
part of your salary package .
 Variable pay is the portion of compensation determined by employee
performance. When employees hit their goals, variable payment is provided as
a type of bonus, otherwise known as incentive pay or commission. Base salary,
on the other hand, is fixed and paid out regardless of employees meeting their
goals.
Components of salary
 Basic
 Allowances
 Incentives / Bonus
 Benefits
 Any other component
What is an Allowance?
An allowance is the financial benefit given to the employee by the
employer over and above the regular salary. These benefits are provided
to cover expenses which may be incurred to facilitate the discharge of
service for example Conveyance Allowance is paid to foot expenses
incurred for commuting to workplace. Some of these allowances are
taxable under the head Salaries. A few of them again could be partly
taxable and few others are non-taxable or fully exempt from taxes.

Dearness Allowance: Dearness Allowance (DA) is an allowance paid to

employees as a cost of living adjustment allowance paid to the
employees to cope with inflation. DA paid to employees is fully taxable
with salary. The IT Act mandates that tax liability for DA along with salary
must be declared in the filed return.

Entertainment Allowance: Employees are allowed the lowest of the

declared amount --one-fifth of basic salary, actual amount received as
allowance or Rs. 5,000. This is an allowance provided to employees to
reimburse the expenses incurred on the hospitality of customers.
However, Government employees can claim exemption in the manner
provided in section 16 (ii). All other employees have to pay tax on it.
 Overtime Allowance: Employers may provide an overtime allowance to
employees working over and above the regular work hours. This is called
overtime and any allowance received for this is fully taxable.

City Compensatory Allowance: City Compensatory Allowance is paid to

employees in an urban centre which may be highly expensive and to
cope with the inflated living costs in the cities. This allowance is fully
taxable.

Interim Allowance: When an employer gives any Interim Allowance in

lieu of final allowance, this becomes fully taxable.
Project Allowance: When an employer provides an allowance to
employees to meet project expenses, this is also fully taxable.
Tiffin/Meals Allowance: Sometimes employers may provide Tiffin/Meals
Allowance to the employees. This is fully taxable.
Cash Allowance: When the employer provides a cash allowance like
marriage allowance, bereavement allowance or holiday allowance, it
becomes fully taxable.
Non-Practicing Allowance: When physicians are attached to Clinical
Centers of the various Laboratories/Institutes, any non-practicing
allowance paid to them become fully taxable.
Warden Allowance: When an employer pays an allowance to an
employee working as a Warden i.e. Keeper in an educational Institute,
the allowance received is fully taxable.
Servant Allowance: When an employer pays an employee to engage
services of a servant, such an allowance is taxable.

HRA(House Rent Allowance ) : The least of the following is exempted :

Actual HRA received

House rent paid minus 10 % of salary(salary means Basic + DA )

50% of salary (same as above) in case of rented house situated in Metro Cities

40 % of salary ,if rented house is situated in any other places

X has received following amount during the previous year, in non-metro city.
Basic Salary – Rs. (5000*12) = Rs. 60,000/-

Dearness Allowance (D.A) 20 % of basic=Rs.1000*12 = Rs. 12000/-

House Rent Allowance (H.R.A.) 40% of basic=Rs.2000*12 = Rs. 24000/-

Actual Rent Paid – Rs.1500*12 = Rs. 18000/-

Calculation

The least of the following amount shall be exempted

Actual HRA received = Rs. 24000/-

Rent Paid in excess of 10% of salary ( 18000-7200) = Rs. 10800

40% of Salary = Rs. 28800/-

Therefore, Rs. 10800 shall be exempted.

City compensatory allowance :Fully taxable. There are no fixed rates on CCA. The rates are decided
on the discretion of the employer.

Project Allowance :taxable.

Servant/helper Allowance :taxable ,if helper used for official purpose, then exempted..

Meal voucher - The employer can offer upto Rs.50 per meal in the form of vouchers which are totally
non-taxable. On any working day, an employee can be offered two meals, which amounts to Rs.2200
per month (for a 5 day week organization) and Rs.2600 per month (for a 6 day week organization),
offering annual tax exemption is upto Rs.31,200. Therefore, Tax exempt ion is upto Rs.2200 / month
(5 day week organizations) and upto Rs.2600 / month (6 day week organizations).

Alternate view :

On any working day, an employee can be offered one meal, resulting Rs. 1100 per month (for 5
days week) or Rs. 1300 (6 days week).

Reimbursement of health club, sports club membership fees and similar facilities provided
uniformly to all employees would not be taxable in your hands.

Medical allowance is a fixed allowance paid to the employees of a company on a monthly basis
irrespective of whether they submit the bills to substantiate the expenditure or not.

However, medical reimbursement is a payment made to employees against specific medical bills
submitted by them, subject to entitlement. If employees want to claim tax benefit, they should
submit bills for the corresponding amount every month under medical reimbursement.
Under the IT Act 1961, medical allowance is not categorised as an allowance which bears exemption.
Medical allowance is, therefore, a fixed pay provided by an employer every month, which is fully
taxable.

Employees can claim a tax benefit of up to Rs. 15,000 under medical reimbursement (payments for
bills or supporting documents).

Leave Travel Allowance (LTA)

In Union Budget 2018, there has been no changes made in Leave Travel Allowance (LTA) - under
Section 10(5) of Income Tax Act:

Leave Travel Allowance is one of the best tax saving tools that an employee can avail. It is a tax
exemption offered by employers to their employees. Leave Travel Allowance as the name suggests is
an allowance paid to the employee by the employer when the former is travelling with their family
or alone. The amount paid as Leave Travel Allowance is tax free.

Employers usually don’t have to submit proof of travel to tax authorities while assessing travel
allowance claims. Even though it is not considered mandatory for employers to collect proof of
travel from the employees, they still have the right to demand documentary proof if needed. The
employee is advised to keep proof of their travel such as boarding passes, flight tickets, invoice of
travel agent, duty pass and other documentary proof in case the assessing officer or the employer
demands for it.

Travel or convenece Allowance – it is offered to meet the cost of travel on tour or on

transfer(including amount paid for packing and transportation of personal effects on such
transfer):exempted to the extent allowances used for said purpose.

Conveyance / transport allowance: Rs. 1600/- per month is tax exempted.

Professional taxes: Most states tax employment on a per-professional basis, usually a slabbed
amount based on gross income.

Gratuity - For government employees, gratuity is fully exempt from income tax. For private sector
employees, gratuity is exempt up to 20 lakh.